Legal Updates

These new Regulations will complete the implementation of the Consumer Rights Directive in a drive to harmonise consumer rights across the EU and, as they come into force on 13 June, will apply to most consumer contacts entered into on and after this date.

Whilst they will work alongside, where applicable, the Consumer Rights (Payment Surcharges) Regulations 2012, they will replace the Consumer Protection (Distance Selling) Regulations 2000 (Distance Selling Regulations) and the Cancellation of Contracts made in a Consumer’s Home or Place of Work Regulations 2008 (Doorstep Selling Regulations) - although the superseded regulations will still apply to contracts concluded before 13 June 2014.

So, assuming that the parties fall within the “trader” and “consumer” definitions set out in Part 1 (regulation 4) and the contract is not considered to be exempt under regulation 6, the contract must then fall into one of three types:

A distance contract, for example, online or telephone sales

An off-premises contract, for example at the consumer’s home

An on-premises contract, for example at the trader’s offices or store

In a nutshell: what do you need to know?

Key points for traders to note for all consumer contracts in scope:

You must seek the consumer’s express consent before taking any additional payments. So, this means that consumers are required to actively ‘opt-in’ rather than it being the default option for additional purchases to a main sale. This only applies where there is monetary value so a pre-filled selection for free newsletter sign-ups would not be caught

Goods are to be delivered within 30 days, unless agreed otherwise with the consumer

Avoid the use of a premium number for customer service or after-sales helpline. A basic-rate number must be available and telephone numbers beginning with the following will no longer be permitted: 0843, 0844, 0845, 0970, 0871, 0872, 0873, 090, 091 and 098

You must not impose excessive payment surcharges when the consumer pays by certain means such as credit or debit cards (this was, in fact, introduced in April 2013 under the Payment Surcharges Regulations)

Digital sales are now covered which includes music and video game downloads

For distance and off-premises contracts:

The list of pre-contract information that must be given to a consumer has been extended

The statutory cancellation period (also known as the “cooling-off period”) has been extended from 7 to 14 days

Once a notice of cancellation has been provided, the consumer has 14 days to return the goods

If the trader fails to provide certain pre-contract information, the cancellation period has been extended to, broadly, one year

Where the consumer does have the right to cancel the contract, the trader must provide a set form of cancellation

A trader is able to withhold a refund until the goods are returned (or evidence of their return is provided) and is allowed to deduct an amount for any diminished value in the goods

The list of ancillary contracts which will automatically be terminated upon the termination of a distance or off-premises contract has been extended

Online traders must make clear where proceeding with the transaction will trigger a payment obligation, by, for example labelling the payment button with “Pay now”

There are new rules relating to cancelling contracts for the supply of digital content not on a tangible medium

For on-premises contracts, a new list of pre-contract information that must be made available to a consumer has been introduced and is contained in Schedule 1 of the Regulations. This information must be made clear to the consumer (unless it is already apparent from the context) before they become bound by the contract. It is, however, important to note that this does not apply to day-to-day transactions where the contract is performed immediately at the time the contract is entered into.

Finally...

If the nature of your business involves entering into contracts with consumers, whether for goods, services or digital content supplied through downloads and streaming and you have not already done so then now would be a good time to ensure that your business’s documentation complies with the new Regulations.

Clarkslegal, specialist Commercial lawyers in London, Reading and throughout the Thames Valley.

For further information about this or any other Commercial matter please contact Clarkslegal's commercial team by email at contact@clarkslegal.com by telephone 020 7539 8000 (London office), 0118 958 5321 (Reading office) or by completing the form on this page.